The UK automotive industry (yes UK numbers but the pain is real here in NZ too) is facing unsustainable financial pressures as it works to meet stringent decarbonisation targets. According to Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), manufacturers have incurred over £4 billion in discounting costs in the UK in 2024 alone to stimulate demand for zero-emission vehicles. This significant expense comes on the back of billions already invested in new technologies and products to transition away from petrol and diesel vehicles.
Hawes emphasized the urgency of adapting regulations and introducing bold incentives to support this transition, especially with market pressures expected to intensify in 2025. These measures are seen as critical to ensuring the industry’s sustainability while driving economic growth and environmental benefits.
Mike Hawes, SMMT Chief Executive, said, “The automotive industry welcomes government’s review of both the end of sale date for cars powered solely by petrol or diesel, and possible changes to the flexibilities around the Zero Emission Vehicle Mandate. These are both critical issues for an industry that is facing significant challenges globally as it tries to decarbonise ahead of natural market demand. Aside from the billions invested in new technologies and products, it has cost manufacturers in excess of £4 billion in discounting in the UK this year alone. This is unsustainable and, with the 2025 market looking under even greater pressure, it is imperative we get an urgent resolution, with a clear intent to adapt the regulation to support delivery, backed by bold incentives to stimulate demand. Such action will support not only the industry, but also deliver for the economy, consumer, government and the environment.”
The UK automotive sector is a cornerstone of the national economy, contributing £78 billion in turnover, £94 billion in exports, and employing over 800,000 people in total. Decarbonisation efforts, while essential to achieving net-zero goals, pose significant challenges that will require government support and strategic planning to overcome.
